You cannot switch instance types while they are running, so your update should be shutting down the small instance and booting up the large one. If you have custom software installed, you have to reinstall it just like with a completely fresh machine.
Further to j0nes' answer, if you create a custom AMI from your initial instance after you've installed all your custom software, you can use it to launch a new instance of a different instance type without having to reconfigure anything. See the EC2 User Guide for details.
You cannot upgrading a running instance from one VM type to another.
You can stop a running instance (even an EBS-based image, I think) and start it up under another VM type.
I use this when doing development: I'm slow so I use the slow 'small' instance when working on cloud infrastructure stuff, but when it runs 'for real' as part of our automated systems, it runs as a High-CPU machine type.
You cannot switch instance types while they are running, so your update should be shutting down the small instance and booting up the large one. If you have custom software installed, you have to reinstall it just like with a completely fresh machine.
Further to j0nes' answer, if you create a custom AMI from your initial instance after you've installed all your custom software, you can use it to launch a new instance of a different instance type without having to reconfigure anything. See the EC2 User Guide for details.
You cannot upgrading a running instance from one VM type to another.
You can stop a running instance (even an EBS-based image, I think) and start it up under another VM type.
I use this when doing development: I'm slow so I use the slow 'small' instance when working on cloud infrastructure stuff, but when it runs 'for real' as part of our automated systems, it runs as a High-CPU machine type.